Amazon’s junglee.com versus Indian e-tailers, will it hurt?

Amazon.com has made an entry into the Indian market last week with Junglee.com, an online shopping site bought by Amazon a few years before. The likely reason for US retailer opting for the Junglee route due to is foreign direct investment restrictions in the multi-brand retail category in India.

Amazon enters India at a time when Indians are shopping online growing through popular outlets like Flipkart, Naaptol, Bookmyshow, Myntra, Homeshop18 and travel portal MakeMyTrip. Amazon made it clear through last month hiring process that it was in the process of setting up its first warehouses in India, which would make shipments faster and cheaper.

E-commerce business is set for a boom in India as more than 1.2 billion people, where incomes are rising but the use of computers, internet and online shopping is still in initial growth. Of India’s estimated 60 million internet users, almost 10 million shop online. Leading e-retailer Flipkart is indeed stepping up visibility across the country through hoardings and television advertisements.

Flipkart have been on their toes in respect of Amazon’s strategy in India. On whether Flipkart would need to review its plans after Amazon’s entry via Junglee.com, Sachin Bansal, co-founder & CEO of Flipkart, told Business Standard, “Junglee, in its current form, is incapable of meeting these expectations and we do not see this impacting Flipkart’s plans to a great extent Junglee.com, being an aggregator site that does only price comparison, the value proposition for the customer is limited.”

Jungle.com enables consumers to find and discover products from online and Brick and Mortar retailers in India. However, Junglee.com did not answer to a questionnaire sent by Iamwire. Besides, Iamwire asked for thought leaders’ view about the impact of Amazon’s entry as junglee.com in India.

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Sandip Aggarwal, CEO, shopclues.com said, “If we see Amazons activity overseas in last 7 years, it has launched full-fledged site only in Italy.  For global retailer like Amazon, India is fragment market place. It may take time as convenience is still not prime factor and FDI is still an issue in India.”

At the same time it hard to negate the point Amazon’s brings. “Amazon is an international retailer; it will bring its brand value and skills in the country they plunge into. It will be only benefitting the India online retailers in terms of user experience and technology implementation,” said Rahul Sethi, CEO, ladyblush.com.

“Amazon’s entry in India will have a positive impact on the Indian online retailers, as the market is still growing. Junglee.com will be learning experience for the existing retailers as it has got good traction of users. The industry will witness 360 degrees growth in coming times,” said Pawan Gadia, CEO, Ferns and petals.

“It is still premature to say anything about whether it will hurt existing e-tailers at this point of time. It will definitely have a good impact in Indian market as it will provide lots of opportunity for the retailers in country. Amazon will be providing good platform for the retailers in India, ” said Manoj Chandra, CEO, Allschoolstuff.

However, talking about the speculation that Amazon, largest online retailer in the world, may be looking at buying Flipkart, Bansal added, “Talk of any future acquisition will be speculation and we would not like to comment. We would like to work on our strengths and address the challenges this market is facing. All of this will require a lot of time and investment and selling our business do not feature in our plans. We intend to establish Flipkart as the largest retailer in the country.”

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Iamwire take

India’s consumers continue to turn to the web to shop for and purchase items, and retailers continue to increase their online visibility through active marketing campaigns. Amazon sites led as the top retail destination in India reaching 6.8 million visitors, representing 14.7 per cent of the online population. At the same time, online retail players in India have intensified their activity looking at the increasing traction of junglee.com.

However, there are lots of retailers who are still in process to get listed on junglee.com and it would be interesting to witness retailer’s growth after their listing on Junglee. The set-up in India allows Amazon’s website to sidestep government rules forbidding foreign multi-brand retailers from operating in India as it only directs shoppers to sites rather than selling the products directly to consumers.

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